By Marcus Leach

Research from Sage UK today revealed a majority of small and medium sized enterprises (SMEs) are not prepared for the impending changes to PAYE Real Time Information.

Businesses of all sizes will be affected by the changes, yet Sage found that over three quarters (76%) of small businesses admitted to having no knowledge of the alterations.

Sage’s UK Omnibus - which surveyed 1,100 small businesses — found that over three quarters (76%) of small businesses admitted to having no knowledge of the alterations.

The PAYE system has remained largely unchanged since its introduction in 1944. The adjustment, which has been implemented to improve efficiency and accuracy within the HMRC, will for the first time require employers to provide information to HMRC for PAYE, National Insurance and Student Loans at the point of paying employees, rather than annually at Payroll Year End. By understanding how the changes will impact their operations, firms will be able to prepare ahead of its implementation in order to minimise its impact.

“Small businesses are faced with a variety of different payroll providers who all offer different levels and standards of support. The new changes are not mandated for providers to include within their software, so it is vital that business owners ensure that the appropriate procedures are put in place," Neilson Watts, Product Manager for People Products at Sage’s Small Business Division, said.

“My advice to any small business who has any lingering doubts around the changes would be not to be afraid to ask your payroll provider for advice, support and guidance to ensure that you and your company are prepared for the changes.”

HMRC are piloting PAYE Real Time Information with employers and software providers around the UK from April 2012, with the mandate phasing starting with large businesses from April 2013. From October 2013, all businesses will be expected to include these changes to their PAYE systems.

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